Hosso v European Credit Management Ltd (Revised)

For the purposes of Sex Discrimination Act 1975 s 6(6), a payment or benefit is regulated by the contract of employment only where the contract governs entitlement to it. Mere eligibility arising from employment is insufficient.

A genuinely discretionary share-option allocation is not regulated by the contract, even if the options have monetary value and may constitute deferred pay. Such a claim therefore falls outside the Equal Pay Act 1970 and may instead fall within the Sex Discrimination Act, subject to limitation.

The Employment Tribunal held that Ms Hosso’s claim concerning unequal allocations of share options between her and a male comparator succeeded under the Equal Pay Act 1970. It awarded her £34,542.36.

The employer cross-appealed on liability. Ms Hosso appealed against the assessment of compensation. The Employment Appeal Tribunal first determined whether the claim belonged under the Equal Pay Act or the Sex Discrimination Act 1975. If it fell under the latter, the claim was time-barred, a point not challenged on appeal.

1. Employer’s cross-appeal allowed; claimant’s remedy appeal dismissed. The Employment Tribunal’s finding that the Equal Pay Act claim succeeded was set aside, and that claim was dismissed.
2. The critical question under Sex Discrimination Act 1975 s 6(6) was whether provision of the share-option benefit was regulated by the claimant’s contract of employment. The Tribunal’s assumption that the options were a benefit with monetary value or deferred pay did not resolve that question.
3. Mere eligibility for the scheme by reason of employment was insufficient. The scheme post-dated the written contract, was not found to have been incorporated into it, and gave the directors discretion as to whether to allocate options and, if so, how many shares to allocate.
4. Even assuming incorporation, the scheme remained genuinely discretionary. It therefore was not regulated by the contract and was not brought within the Equal Pay Act. This differed materially from Hoyland v Asda Stores, where the bonus scheme created a fixed entitlement under its rules for eligible employees.
5. The Tribunal’s statement that genuinely discretionary elements of pay are not covered by the Equal Pay Act was correct. The claimant’s remedy appeal necessarily failed because the liability finding had been set aside.

• Employment Appeal Tribunal: The employer’s cross-appeal against the Employment Tribunal’s liability finding was allowed. The claimant’s appeal against compensation was dismissed consequentially.
• Employment Tribunal: By Reasons promulgated on 3 August 2009, the Tribunal held that the Equal Pay Act claim succeeded and awarded compensation of £34,542.36.